FR - Uncommon Capital Asset

Question 1

What are mineral resources?

Answer 1

• Are non-regenerative materials in the earth’s crust, including minerals, oil, natural gas, and other non-renewable resources

Question 2

What are some applicable standard for Uncommon capital asset

Answer 2

IFRS 6, IAS 2, IAS 16, IAS 38, IFRS 16

Question 3

What are the stages of natural resources

Answer 3

Prospecting - Exploration - Evaluation - Development - Production/ extraction - Closure and rehabilitation

Question 4

What are the subsequent measurements for natural resources

Answer 4

For IAS 16 and IAS 38
The standard used for subsequent measurement depends on the nature of the cost
- Under cost model - exploration and evaluation asset are depreciated over their useful life
- REvaluation model - exploration and evaluation asset are accounted for as separate class of asset

Reclassification of exploration and evaluation asset
- Entity has determined that the exploration and evaluation asset are commercially viable, it moves the development, processing, and extracting phases

Impairment of exploration
-IAS 36 apply
- Group assets in cash-generating unit (CGU)
2. Determine whether an impairment test is required, indicator that exploration and evaluation asset may be impaired
3. Measure the recoverable amount
4. Where the recoverable amount is less than carrying value, record an impairment loss through net income for the difference

Question 5

What are the presentation and disclosure for mineral resource

Answer 5

• The cost related to exploration and evaluation are presented separately on the statement of FP
• Exploration and evaluation cost require separate disclosure

Question 6

What is agriculture defined as a biological asset

Answer 6

IAS 41 - bearer plant and agricultural produce at the point of harvest
Biological asset - Living thing , primary types of biological asset cover in standard are - consumable biological asset
Bearer biological assets such as an animal that is raised to supply a product

Question 7

How is the bearer plant determined for the recognition and initial recognition

Answer 7

• Following condition is met
  1. Entity control of the asset because of past event
  2. It is probable that future economic benefits associated with the asset will flow to the entity
  3. FV or cost of the asset can be measured reliably

Initial measurement - is at FV less estimated cost to sell

Question 8

Provide what the subsequent measurement for biological asset

Answer 8

It will be measured at its Fv less cost to sell. updated at the end of each reporting period based on the current condition
- measurment is based on FV and not the cost incurred

Gain or losses - arise are initial measurements of the biological asset

Question 9

What is the initial measurement for agricultural produce & subsequent measurement

Answer 9

• the produce harvested from the entity biological asset is measured at FV less cost to sell
  Subsequent measurement - it become inventory and falls under IAS 2. It is treated as cost of the inventory, future measurement is dependent on the lower of cost and NRV

Question 10

Explain the IFRS and ASPE difference

Answer 10

For ASPE 3041 - Agricultural
The classification - Inventories are biological assets or products that are
- Held for use in the ordinary course of business
- Held for use in productive captivity with short productive
- Acquired or developed for use on a continuing basis with other than short productive live.